Can New Chinese Investment Policies Save the Siamese Crocodile?

Crocodiles bask and elephants roam in Cambodia’s Cheay Areng River valley, an area known to conservationists as one of the biodiversity jewels of Southeast Asia. Here, amidst the forest, grassland, and wetlands, Khmer Daeum indigenous communities have lived in harmony with nature along the river for centuries, harvesting nature’s rich bounties in keeping with their seasonal cycles.

Yet, as ominous as the arrival of Southeast Asia’s annual monsoon clouds, a new threat now looms for these villagers. Since 2006, plans have progressed for a hydroelectric dam that will flood the upper valley and dramatically change the river downstream. Whilst the monsoonal rains bring life to the river valley, this dam, if built, will change indigenous communities’ way of life forever.

Projects like the Stung Cheay Areng dam epitomize the dilemma confronting Cambodian decision-makers as they seek to balance meeting the country’s growing electricity needs with securing rural peoples’ livelihoods. The dam also challenges the Chinese government to ensure that overseas investments by Chinese companies are undertaken responsibly, as China Southern Power Grid is the lead developer on this dam project.

Nature and Man in Harmony

The upper reaches of the Areng valley, which the dam’s reservoir would partly inundate, is home to some of Cambodia’s rarest wildlife including 31 species of mammals, birds, reptiles, fish, and amphibians that are globally threatened with extinction. For example, the Siamese Crocodile, one of the world’s rarest crocodile species, has a global wild population thought to be less than 200 individuals. If built, the dam’s reservoir would inundate one of the most important of only six known breeding sites and could wipe out this fragile population.

The dam will also flood six villages that are home to Khmer Daeum people and affect more than 1,600 people. These indigenous communities moved into the area over 600 years ago and consider it their ancestral home. They survive through paddy rice cultivation and forest garden agriculture, fishing the Areng River, and collecting a variety of non-timber forest product

Riverbank tracks trace the Siamese crododile

s. Many more villagers downstream of the project would also suffer the impacts of the river’s changes. Flooding the river valley and indigenous peoples’ land would be a tragedy for these communities, whose social histories lie in the landscapes that will be inundated.

The Khmer Daeum’s Buddhist and Animalist beliefs intimately link them to surrounding nature. Conservationists observe that the traditional conservation beliefs of these communities, including the protection of spirit forests, are the main reason why the Siamese Crocodile has managed to survive where almost all the other Siamese crocodile populations have been driven to extinction.

There are Better Ways to Meet Cambodia’s Power Needs

The Stung Cheay Areng dam’s US $327 million price tag belies the project’s full social and environmental cost. But the current perception amongst Cambodia’s electricity planners is that very few other viable electricity supply options exist. Cambodia’s electricity prices remain amongst the highest in the world, a result of the devastating 1970s civil war and chronic underinvestment in the subsequent decades. Since the early 1990s, when stability returned, the Cambodian government began proposing plans to build several dozen large hydropower dams. And in the past five years, Cambodia’s warming political ties with China have led to several Chinese dam-building companies to offer to build, operate and finance these projects, including the Stung Cheay Areng dam.

But Cambodia has many energy options besides hydropower dams, including investing in modern renewable and decentralized energy technologies such as biogas, biomass, and solar. All of these technologies have already been successfully deployed in Cambodia and could be scaled-up, allowing Cambodia to protect its river resources and the livelihoods of communities that depend upon them, whilst at the same time meeting urban and rural electricity needs. Unfortunately, Cambodia’s current electricity plans are prepared largely behind closed doors and fail to properly assess all the electricity options that are available.

Yet, even traditional supporters of large dams in Cambodia have questioned the viability of the Stung Cheay Areng project. A recent study by the Japanese aid agency, JICA, ranked Cambodia’s potential hydropower projects, including the Stung Cheay Areng dam, based on their speed of implementation, economic benefits, technical issues, and environmental and social impacts. The study concluded that developing ten priority sites would be sufficient to meet projected national electricity demand, and the Stung Cheay Areng did not make JICA’s top ten list.

Dam Developers Asked to Consult with Local People

The Stung Cheay Areng valley

It is now widely recognized that for development to be equitable and sustainable there must be public acceptance of key decisions, especially for high-impact and high-risk infrastructure projects such as hydropower dams. This public acceptance can only be built through meaningful public participation in a negotiated decision-making process that explores a selection of options - including the “no-project” option.

In April 2009, Cambodian NGOs were invited to meet with government officials to discuss the project’s Initial Environmental and Social Impact Assessment. But, asking NGOs to comment on a project report is only one small aspect of this more comprehensive process. Recognizing the project’s serious impacts and the fact that affected communities had not yet been consulted, the Cambodian NGOs asked the government to follow a public participation process based on the recommendations of the World Commission on Dams (WCD).

NGOs have also reached out to the dam’s developer, China Southern Power Grid (CSG), which has in recent years sought to increase its overseas investments, particularly dam projects. In May 2008, International Rivers and local partners in Southeast Asia sent a letter to CSG raising concerns about Stung Cheay Areng dam and other proposed CSG dams in the region. In the letter, we recommended that CSG prepare an environmental and social policy that meets international standards and complies with domestic policies regarding overseas investment. We also asked that the company not move forward with the Stung Cheay Areng dam because of the project’s serious and unavoidable social and environmental impacts.

Guided by China’s “Going Out” policy, Chinese dam developers like CSG are now building and financing an increasing number of large dams around the world. Whilst Chinese developers are welcomed by host country governments, many projects have come at an unacceptably high cost to the environment and affected communities. Responding to growing scrutiny of Chinese companies’ overseas investment by civil society organizations and the media, the Chinese government has recently committed to a number of new investment policies. These include the State Council’s “Nine Principles on Encouraging and Standardizing Foreign Investment” in October 2006 and SASAC’s “Guidelines on Fulfilling Social Responsibility by Central Enterprises” in January 2008.

CSG has yet to respond to our letter. But given the threat that the Stung Cheay Areng dam presents to indigenous communities and critically endangered species, such as the Siamese Crocodile, it is difficult to see how the dam is the right way for China Southern Power Grid to follow government policy and “go out.” What is clear is that if China’s new policies on responsible overseas investment are working, then the Stung Cheay Areng dam is one project that shouldn’t proceed.